Portland’s famous restaurant industry is struggling. Nearly two years after the first COVID-19 case diagnosed in Maine, it remains lagging behind its pre-pandemic strength with fewer restaurants, city and state data show.
That’s been compounded by the hesitancy of some residents to resume dining out while COVID-19 remains a factor.
Portland and the nearby communities of South Portland, Westbrook and Long Island saw a larger percentage drop in total restaurant sales from 2019 to 2021 than any of the 37 other Maine economic regions for which sales in 2019 and 2021 were available, according to recently released taxable retail sales data from the Maine Department of Administrative and Financial Services.
Those regions feature communities from all 16 of Maine’s counties.
Complete restaurant sales data in 2019 and 2021 were unavailable for areas based in Jonesport, Livermore, Machias, Pittsfield and Winterport.
Portland saw around $549 million in restaurant sales in 2021, down 8 percent from the $600 million it saw in 2019.
Meanwhile food service licenses in the city have dropped nearly in half since 2019, according to city data, the result of many restaurants closing due to the weight of the pandemic. Most recently, city stalwart The Back Bay Grill announced it was closing after 35 years in business.
Portland’s restaurant industry is different from others across the state, said David Turin, the chef and owner of David’s Restaurant in Monument Square, in that the occupancy costs are unusually high. In a market that was booming pre-pandemic, many restaurant owners began investing significant money, increasing their occupancy cost to revenue ratio.
“People got really bullish on Portland and they were like ‘yeah, we can spend way more money than we used to spend,’” Turin said. “Then the pandemic hits and now everybody is in debt up to their eyeballs.”
Turin noted that fewer restaurants mean fewer sales, and that coupled with being open less in 2021, could account for the decline.
The restaurants that have remained are doing pretty strong business, he said, noting that David’s Restaurant’s 2021 revenues was a record. They saw a significant volume of people that peaked during the summer.
Yet, profit margins are lower than pre-pandemic, he said, largely because of a 40 percent increase in labor costs compared to 2019. Electricity, food costs, insurance and trash removal have also gone up significantly.
One fear that Turin has is that once Portland comes out of its relative restaurant scarcity, and many continue to not want to eat in-person, the resulting lower volumes might not be enough to keep going.
“If our numbers were to be below where we were in 2019, we couldn’t survive anymore,” Turin said. “We have to do more volume just to run in place.”
However, the numbers also show that Portland’s restaurant industry is making a significant comeback after numerous difficulties during the pandemic, said Matt Lewis, president of HospitalityMaine, an advocacy group for Maine’s restaurant and hotel industries.
Indeed, 2021 sales came in at around 92 percent of 2019, a nearly complete return in a year that began without the widespread availability of the COVID-19 vaccine and included fewer restaurants in the city. And it could have been far worse, for instance, if the vaccine had come later or if travel restrictions enacted by Gov. Janet Mills had lasted longer, Lewis said.
The numbers could be due to a reluctance by some in Portland to venture back into restaurants because they are concerned about the pandemic, though Lewis said it is unlikely that that is the sole reason.
As is the case with other urban areas nationwide, Portland residents tend to be more COVID-conscious than others across the state: They are more likely to wear a mask and avoid dining at restaurants or bars than rural counterparts, according to a 2021 study published in The Journal of Rural Health. For some in Portland, that has meant going out to eat far less or not at all since the beginning of the pandemic.
“There is still a percentage of people that are reluctant to go into restaurants,” Lewis said. “But it’s getting smaller every day.”
A spokesperson for the Portland Regional Chamber of Commerce did not respond to a request for comment.
Restaurant sales in Portland were virtually identical from June to December 2021 compared to that same period in 2019. That puts the area behind the rest of the state. In nearly every other region in Maine, there was growth from 2019 numbers instead.
Though its total sales are a fraction of Portland’s, Dover-Foxcroft saw the strongest restaurant growth in the state from 2019 to 2021, with sales increasing by 24 percent.
Many of the southern Maine communities outside the Portland area did see growth in their restaurant industry, including Sanford, Kittery and Biddeford, though.
But the largest increase came in the Sebago Lake region, which includes Windham, Standish, Sebago, Naples, Gray, Bridgton and other nearby communities, which grew by 14 percent to $118 million in 2021.
The data weren’t surprising given the out-of-staters who had settled in the region since the pandemic as well as the efforts of local businesses to stay afloat, said Sebago Lakes Chamber of Commerce director Robin Mullins.
A lot of that growth came in the summer months, a time when tourists and seasonal residents flood the area — tourism was actually up from 2019 on some measures. With cases low and the vaccine widely available, many Mainers thought the pandemic was behind them.
“It had been so long that people were stuck in,” Mullins said. “We may have gone out more than we normally would have.”
One of the locations that saw a significant rebound was Chute’s Family Restaurant, which has been serving breakfast and lunch in Windham since 1978.
But 2020 wasn’t easy. As it saw other local restaurants shutdown, Chute’s only barely broke even on the year due to Paycheck Protection Program coronavirus relief loans, co-owner Bruce Stevens said.
But by June 2021, the restaurant was back to the pre-pandemic normal and seeing many of the regulars – often locals on weekdays and those from all over the region on weekends. Stevens said those regulars played an important role in returning it to normal business.
“Some of them took quite a while before they went out in public, but they gradually started coming back last fall,” Stevens said. “They took care of us, I guess. We try to take care of them.”